U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 01-28-2009, 06:03 PM
 
222 posts, read 844,781 times
Reputation: 65

Advertisements

We are purchasing a home that should close the first week of March. We have looked at a lot of homes and feel like we got a good price and that it should possibly appraise for more than our purchase price.

I know that banks usually just appraise it to make sure it is valued at the purchase price. Can we request a full appraisal to find out if the value is more and if it is, will the money we have to put down and the higher appraised value then put us at 20% of the homes value and allow us to skip paying PMI?

Does that make sense?

When we bought our last house it appraised for more than the purchase price and the mortgage person said that he was told it appraised at that without the appraiser even trying to find extras, just the basics that the house included.
Rate this post positively Reply With Quote Quick reply to this message

 
Old 01-28-2009, 06:08 PM
 
28,460 posts, read 80,887,210 times
Reputation: 18660
That is NOT how it works.

PMI on initial purchase kicks in whenever the amount you put as downpayment is under 20%.

If appraised for 10x what you are buying it would not matter.

The appraisal is solely to verify that the house is worth at least what you want to borrow/buy. There is no such thing as "deluxe appraisal".

If you can put down 10% you may be able to get a second for the extra 10% and avoid PMI that way. Good Luck!
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-28-2009, 06:58 PM
 
222 posts, read 844,781 times
Reputation: 65
Thanks for the info. How long do you have to wait to get it re-evaluated for the PMI to drop off. It seems like with our first house, we were paying PMI for several years and then I called the mortgage company and they took it off based on the value of the home at that time. I don't remember an appraisal ever being done to verify that the PMI could come off. That was about 8 years ago so I might not be remembering things correctly but once you buy the house, how is it determined that the PMI can come off?

I am sure I am making this harder than it needs to be. If we decide to go with a regular loan with 10% down, would we have to wait until our principal is 20% less than our original purchase price? That wouldn't seem right because the 1st home I was talking about was originally purchased for $110,000 and when I called our principal was probably $105,000 but the value was now probably around $150,000 (just estimates) and they took the PMI off. I think my mind is going around in circles and it is a lot easier than I am making it. I obviously haven't dealt with this in a long time. Last time we had 20% so this wasn't even brought up. Thanks!
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-28-2009, 09:58 PM
 
Location: Houston
36 posts, read 141,601 times
Reputation: 24
As this is a purchase scenario, no matter how much ever the house is purchased for always the lesser of appraised value & sales price will be taken into consideration by the broker/lender.

About PMI, it completely depends on the market condition in a particular locale at that point of time. For eg. if you purchase a house for $100000 with 10% down payment as on today and if after a year the appraised value comes up a $150000 for same property then PMI will be removed immediately upon your request to the lender. However if the market value declines after a certain period from buying then it is in best interest to let your mortgage be as it is. So there is no set time for how long it will take to get rid of PMI but yes once the principal balance on your mortgage comes below 80% of the original price you bought it for again the PMI will be put off from your payments. So just keep an open eye as to what the home values are selling for in your neighborhood.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-29-2009, 08:09 AM
 
28,460 posts, read 80,887,210 times
Reputation: 18660
Depends on the lender / program.

FHA rules are more strict, there are other threads on the same topic here. Please use search.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-29-2009, 09:39 PM
 
222 posts, read 844,781 times
Reputation: 65
Thanks! We also met with the lender today and it is clearer. I think I was getting messed up because the last time we bought (1 1/2 years ago) we had the 20%. The first time we bought we didn't and I knew it was taken off, at some point, after I made a call. Thanks for all that input. I think I was having a brain cramp and couldn't wrap my head around anything.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Similar Threads

All times are GMT -6.

© 2005-2022, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top